tv [untitled] April 26, 2012 4:00pm-4:30pm EDT
commitment we made four years ago to our ranchers and producers. at the same time, i believe the agriculture sector can contribute its fair share to deficit reduction and the bill before us provides significant savings and mandatory spending programs. however, all sectors of this agricultural bill must contribute its fair share, and the key is to do this in an equitable and fair manner, as we have always done. i participated in the writing of four farm bills as a member of congress, none of which have been easy. and each bill has had its unique challenges and opportunities. balancing the needs and interests of all agriculture
requires patience, fairness and a willingness to work with all members of this committee. it's very important we recognize the unique differences between the geographical regions and the commodities grown in those regions. as the international agriculture markets become more complex worldwide, we must be mindful that a one-size-fits-all program will not work for u.s. agriculture with reasons -- with regions more diverse than ever before. we need to recognize this diversity by providing producers with different options to confront the marketing and regional differences that define our country. washington does not always know better. right now the bill before us fails this test. it is neither equitable, nor fair, and attempts to redistribute resources from one region to another. after deducting a fair share for deficit reduction, certain commodities receive more resources than others and crops
such as peanuts or rice are left without any safety net whatsoever. we've read rereports and analyses illustrating the lopsidedness of the bill. among the biggest losers in the budget baseline are wheat, barley, grain, rice, cotton and peanu peanuts. we should not convince ourselves will will not cause enormous negative consequences for many regions of the country, but simply by making the bill more conducive for certain crops at the expense of the many, this bill lacks balance. some will say that planning shifts are responsible for much of the change in the budget baseline, and that is in part true. but it does not take away from the injury that would be inflicted on particular regions of the country, nor does it tell the whole story. by squeezing all crops into a program especially designed for one or two crops, this bill will force many growers, particularly in our region, to switch to those crops in order to have an
effective safety net. and isn't this the very planning distortion caused by farm policy that we ought to avoid? but there's another very egregious problem with this bill. the safety net will not be there when farmers truly need it, whether offered as an on-farm or area wide basis, a 10% band of revenue protection will not help farmers, should crop prices collapse. under this bill, a farmer has an 11% deductible with the next 10% of losses covered. however, many farmers may be totally exposed to a plunge in crop prices that hits the proposed loan rates. these proposed loan rates are set so low, if prices reach that point, the farmer is going to be out of business. and sure, crop insurance can cover the production side of the risk, if you can afford to buy higher coverage. but it does not cover consecutive year-to-year low prices. even the 10% revenue band the
bill provides has significant problems, since the revenue guarantee is based on the previous five years price and production which may not be sufficient to provide an effective safety net. this is wrong, and for this and my concerns over the process that led us here, i'm not likely to support this bill. in spite of this, i do recognize the chair and ranking member for including a new crop insurance program that complies with our international commitments. as former chairman and ranking member of this committee, i've always been committed to try to find a solution to the wto brazil case. i authored legislation in 2005 and again in 2008 that made significant changes in the cotton and export programs to bring us into compliance with our international commitments. and along with senator cochran, we eliminated the step two program, we reformed the cotton marketing loan program and reduced the cotton counter cyclical program unilaterally and in good faith. we find ourselves significantly
reforming the cotton safety net with the stacks program. the program in this bill is a significant departure from what is available to other covered commodities, and hopefully will resolve the wdo dispute with brazil once and for all. i hope now our brazilian friends will engage in a real and meaningful way to put this issue behind us. the farm bill in front of us attempts to shoe horn all producers into a one-size-fits-all policy. i do not believe this is equitable to my producers. producer choice is the better course to follow, and i regret the commodity title does not recognize this priority. let us remember that at the end of the day, the reason we are here is to represent the hard-working men and women who work the land each and every day to provide the highest-quality agriculture food and products in the world. i believe we have the opportunity to write a bill that can be equal to their commitment in providing the food, feed and fiber that allows us to be the greatest nation on earth.
but right now, it appears what this committee lacks is a willingness to do so. but i do look forward to the forthcoming debate, madam chairwoman, and thank you very much. >> thank you very much, senator travis. let me reiterate what we have talked about privately. this is step one of a long process. we're going to continue to work with you to improve and address the concerns that you have. let me turn to senator baucus and first say thank you for your work as chairman of finance committee. but in this committee, i want to particularly say, we wouldn't have a livestock assistance program without your advocacy, and that's a very, very important ten-year baseline part of this bill. we wouldn't have significant improvements in the farm level art program. i've learned more about montana. i think i could tell every member of the committee about how montana has bigger -- has a bigger counties than michigan. i now understand that. and the differences. and all seriousness, it's part of the challenge.
and i very much appreciate your advocating. nobody could fight harder for montana. and we appreciate your advocacy. and leadership. >> well, thank you madam chairwoman. if possible, i would like to return the compliments that other senators have given to you. and i say if possible, because i don't know if i can compliment you even more. but they have complimented you so well. i just want to associate myself with their compliments. you have worked so hard to get us here. all of the -- the numeral telephone calls i've received from you, which i deeply appreciate. the calls i've made to you. i hope you appreciate. as we try to work all this out. i mean, you're always there. i don't know anyone who works harder than you. and is more receptive than you. you've been just terrific in helping put this bill together. there are times when i wasn't sure we were going make it. but you hung in there. you're determined. it's all resolved. and i for one think i can speak
for virtually every member of this committee and say we appreciate it. the same with the senator from kansas. i'm not sure if i was surprised or not surprised how hard you worked. basically not surprised. because you know the subject so well. you've got a good sense of humor. you try to do what's right. while you're protecting kansas and thinking about the country. but senator, i want to tell you how much i appreciate your work here, too. and there are many others there in the committee. we have many meetings with the senator from georgia trying to work out the cotton issues, stacks -- special inspector wto. and i -- comments made by the chairman, keep working together so we can find a way to make that work. it makes sense. and i also want to just thank the senator from north dakota. now that we're thanking everybody here, i especially want to thank him.
he gave a great statement, a statement i want to associate myself with. pointing out a lot of the myths in the country about agriculture. one of the myths being the money given to farmers. as the senator so well pointed out, most of the money goes to the nutrition programs. doesn't go to farmer commodities. a lot of americans don't know that. especially people in the east. they assume, there they go, those farmers are padding their pockets, which is totally untrue. and the senator from kansas, this is a reform bill, we're saving $25 billion. and i agree with the senator from kansas, that's a statement we can't make too often when we get to the floor. it is so important for people to hear that and to know that. and you worked to -- back at the super committee era to come up with a program to save about 23 and now it's even better, close to $25 billion. and i just -- i can't tell you how much i appreciate that.
i have -- prolonged this part of the markup with statements. but just to say how important this is to our state. agriculture is our number-one industry. it's the most important industry, by far, in my state. one out of five jobs is related to agriculture in montana. one out of five. it's a bedrock of our state's economy. as you have alluded to, madam chairwoman, i don't want to overstate this point, but montana is a little different from other states. doesn't rain in montana. we have huge counties, as you said. and our farmers, our wheat farmers, really have no option. they've got to plant wheat. maybe they go a little on -- maybe lentils, but can't plant corn no n montana. can't plant other soybeans, for
example, in montana. those options are available to farmers in other states. they're not available in our state. so we've got to make sure the farm bill makes sense. we all want a safety net that makes sense. enough of a safety net, but not too much, trying to find the right balance, in each state that balance is different than in other states. and i just -- am so thankful to you for working out a way that is -- recognizes the sensitiv y sensitivities in our part of the country, which includes north dakota. and i want to thank senator conrad too as we try to work out something that made sense for our part of the country. we want to be a part of the solution here. we don't want to be part of the problem. want to be part of the solution. and working with you to help get there. and this is the first step. there will be other steps along the way. florida and so forth to keep making improvements, as is the case with cotton and some other commodities. deeply thank you for that. you mentioned the livestock of a
program, and thank you so much for that, to make that permanent. because there are a lot of livestock producers, whether it's floods, whether it's fire, whatever it is, loss of grazing land, losing livestock that's just -- it just helps. and i get a lot of compliments at home that -- that program has helped. you know, farmers and ranchers in my state are the same as we are in any other state. they're kind of philosophical about life. you know. no, they can't predict the markets very well, can't predict the weather very well. but they're still optimistic, get out there and want to farm, want to rank, and they don't want to take advantage of other people. and this bill, i think, strikes that right tone of just being there, because we are all in america together here. and it just means a lot to me that you found -- i think a pretty good solution here. want to keep working with you as
we proceed. so thank you very much. >> thank you very much for those words. i want to turn now to senator joe hanson. first, on this committee, we've always said, we have farmer chairmen and we have ranking members. we are fortunate to have a former secretary of agriculture. and let me just note at this point that when senator joe hance was secretary of agriculture, he talked about conservation. we have taken a number of your ideas. you really give us a basis for thinking and for moving ahead. i think we have a terrific conservation title. and you deserve a lot of credit for giving us a lot of ability to get started. so i want to particularly thank you for that. >> well, madam chair, thank you very much for that. i appreciate you using some of those ideas and what more can i say in appreciation to you and to the ranking member? you've both done a great job. i will offer an insight that
writing the farm bill from this table is a lot different from writing the farm bill in the office of the usda. but the great thing about this committee is there's such deep experience. you know, you look at this committee, you virtually everybody here has great ag background. they've either chaired this committee or been ranking members. so it's been very, very helpful in flushing out my ideas, as i thought about this package. i've been to camp saying let's move forward. i'm going to support your efforts today, because i do believe it's a great first step, and we need to move this process along. a couple of thoughts i would offer. the ag economy has experienced a remarkable few years here. it is really stronger than it's ever been in some aspects.
it's historically strong. in recent years, many producers have seen the opportunity to feed people or provide clothing or fuel in parts of the world that they probably would have never imagined that they would provide those items. as a result of that, we've seen farm income reach a record $98 billion. with very low debt to asset ratios. i'm often asked, are you concerned about what happened in the '80s in terms of could it happen today? sure, we always have that concern. but having said that, farmers tend to business, they've kept their debt reasonable, they kept it low. and they have really tended to the business that they run. but at the same time, we all recognize, including our farmers and ranchers, that our nation's budget situation is more daunting than ever.
with our country's total national debt over $15 trillion, the federal government is now borrowing about 42 cents of every dollar. this farm bill, though, like no other committee that i am aware of, has taken on the responsibility of providing deficit reduction and as you and the ranking member have pointed out, this farm bill saves at least $24.7 billion. you can only imagine if other committees would accept the same responsibility how big a step we would take in dealing with our deficit issues. but in this package, like every piece of legislation, there's probably some things i like, there's probably some things i don't like. definitely is true. i'm not a fan of target prices and reference prices. people may ask, why is that? i'll share a story with you i was secretary of agriculture
when katrina struck. devastating impact. part of the impact of katrina was that for a period of time, the shipping lanes down the river, the mississippi river, were blocked. we all knew that that was temporary. we all knew that work was going to start just as soon as the wind stopped blowing to move the items that had sunk to the ships and get that shipping lane opened up. but in a very brief period of time, the price of corn dropped from about $2 a bushel to $1.60 a bushel. what happened? perfectly legitimately, everybody locked in their loan deficiency payment, $4 billion went out the door at the usda, almost overnight. now, we knew that was a very
temporary time and prices, in fact, came back to that $2 level. hard to imagine these days when we have such higher prices than that. what am i saying? i'm just saying when you set targets, then you are basically sending into the marketplace a direction as to how to utilize that target. so at the end of the day, the loan deficiency payment was paid out, the farmer continued to own the commodity, and at the end of the day, really suffered no loss, except in rather unusual circumstances. well, what i have heard, and i think what members of this committee have heard is that the crop insurance plan offers the best opportunity to go to a more market-oriented farm bill. and i just want to wrap-up today by just applauding you and the ranking member and so many members of this committee for recognizing that. i just think it's a significant
step in the right direction for farm policy. and i applaud your efforts. thank you, madam chair. >> well, thank you very, very much. and now to another nebraskan. first before calling on senator nelson, i want to say, it has been terrific working with you. we are going to miss you in your retirement. you have been a stall ward, strong advocate for nebraska and agriculture and on a personal level, wonderful working with you coming into the senate. so we have always, always appreciated your efforts. and we're going to miss you. >> well, thank you very much, madam chairwoman. and it's sort of like hearing a eulogy. and -- but i appreciate your kind thoughts, and i want to also associate myself with all
the very glowing and truthful comments about working with you. i've never -- i've never known in a committee structure a chairperson who reaches out as you have in this effort. and it's why we are where we are. obviously, there isn't such a thing as a perfect bill. but if it could achieve perfection, i know you would have that as your target. and to say thank you for being tireless in this effort. i know about all the telephone calls we've had and the meetings and the staff meetings and i want to thank you and the staff. and it's unfortunate the ranking member is not here. because i know he's from the state of kansas, but i just wanted to remind him that before kansas became a state, nebraska became a state, kansas was part of the nebraska territory. i'm sure -- >> you can repeat that again when he comes back. >> of course.
well, the hard work has really been important. and i -- it's the -- as you put the title of the bill together, agriculture reform, food and jobs act of 2012, it's clearly apt that the word "jobs" is in the title. agriculture in nebraska is responsible for one of every three jobs. and agriculture is the backbone of nebraska's economy. it drives the economy, it supports the communities, provides what we call the basis for the good life that we all enjoy. and as with any bill, this legislation isn't perfect, but it's a start. and an excellent start. i believe it strikes the right balance between taking the needed steps in today's fiscal climate to cut spending as has been indicated, while maintaining a strong and important safety net to ensure a stable supply of food, feed, fuel and fiber.
and in a time of partisan gridlock and deficit concerns, it's good to see the bipartisanship that madam chair you and ranking member roberts have been able to maintain. and also work so strongly for safety net while making a significant contribution to debt reduction. in the -- in this committee, we've produced a bill, as noted, that cuts at least $23 billion more from agriculture programs. it represents 2% of the nation's budget, and 23-plus-billion reduction represents nearly 2% of the cuts proposed in the deficit legislation. that congress worked on last year but couldn't quite pass because of partisanship. we have put together a bipartisan budget savings bill, and if others across our government followed this example and made similar cuts, we would be able to achieve the goal that we all have of reducing the
deficit and getting it under control. as i've said in the past, the -- this bill will permit people in agriculture to establish their own risk management tools, rather than having to rely on the goodwill of the government to bail them out at times that they have faced downturn in their agricultural efforts. when -- while the u.s. agriculture has been one of the bright spots in the economy throughout the economic downturn, farming and ranching are still, as noted, inherently risky undertakings from volatile markets to the whims of mother nature. i'm also pleased with the components of the agricultural risk coverage, a.r.c., i'm glad the committee recognized the need to provide producers with a comp. mint re risk management
tools to help farmers adjust to lower commodity prices while input prices are likely to remain high. beyond the broader production agriculture provisions, i'm glad the committee has recognized the unique roles, conservation and rural development play in rural communities, and the benefits they provide the nation as a whole. so i applaud the committee for such a strong conservation title that recognizes the important role of creating partnerships with local stakeholders avoiding the bureaucratic top-down approach to gain more buy-in for farmers, sportsmen and conservationists alike. these groups will be able to ensure the productivity of our soil, preserve the quantity and quality of our nation's water and protect wildlife for sportsmen and conservations alike. while the mark was unable to find money for the rural development title, i'm still glad the committee recognizes the importance of the programs by reauthorizing many of them.
and improving upon them from the 2008 farm bill, especially the program referred to as the rural micro entrepreneur assistance program. rural development provides small businesses which make up 90% of all rural business. the needed -- provides the needed capital to finance start-up costs and provides the backing for young and beginning farmers to enter production, agriculture to replace retiring farmers and ranchers. while we were unable to find the necessary mandatory money, i hope to work with both chairwoman and the ranking member to ensure there is some level of support made available as we work toward moving the bill to the floor and eventual senate passage. so once again, i thank the chair and the ranking member, roberts. and since he's here, i noted at the beginning of my remarks that while you're from kansas, before kansas became a state, you were part of the nebraska territory. i know that rankels the ranking
member for me to remind him of that, but facts are facts. thank you both. >> if the senator would yield for a moment. >> of course. >> that is true, but, of course, now, you've left for the big ten and are no longer a member. of the great plains society. >> and we welcome you to the big ten. >> thank you. and now let me say, welcome to senator -- new member of the committee, first farm bill here in the senate. it's interesting. i know that i've always said michigan has more diversity crops than any other state so we have to pay attention to every page of the farm bill. senator boozman has to pay attention to rights, rights, rights. he is a strong, strong advocate. we have more work to do with you. and we will. and we're grateful for your hard work. >> well, thank you, madam chair and we do appreciate and i want to echo what's been said about your hard work and the ranking members' hard work and also your patients, senator baucus alluded
and many others, the phone calls, the e-mails, the grabbings on the floor and stuff. and, again, we do appreciate you and the ranking member for putting up with us ask and trying to address our needs. the other thing i think we have to recognize is your staff and the ranking member staff, but also as i look around the room and see all of our staffers sitting here with bags underneath their eyes, we really do appreciate their hard work. the nation truly has a very diverse fabric of agriculture with a variety of different risks. and writing a farm bill that serves a safety net for all crops and regions certainly is no easy task. yet the responsibility is with us, and we must embrace it to ensure that the united states continue to have the safest, most reliable and most affordable supply of food and fiber in the world. our nation is at a crossroads, and we are in desperate need of discipline fiscal restraint. i'm pleased the farm bill includes important reforms,
reduces spending by more than is required of this committee. and eliminates depolitic active or obsolete government programs to ensure we are getting the most out of every dollar we invest in agriculture. the forest title contains important improvements that will benefit america's forest industry. the improvements to the usda markets program and the managers package will allow forest products to be included in the program. the current usda bio-based markets program favors foreign products over our american forest products, which puts american workers at a disadvantage. so i'm happy with the progress on this issue, and i appreciate the effort to promote and purchase our renewable home-grown products. crop insurance also contains some important improvements and provisions for irrigated and nonirrigated enterprise units and yield plugs will help many producers who may have otherwise
been left unprotected by the elimination of direct payments and the counter cyclical program. at the same time, this is not a perfect bill, and i have serious concerns about the commodity title and the impact it will have on southern producers and the planning decisions they'll have to make. i also have concerns about some missed opportunities in the terms of eliminating waste and abuse and the attrition title. the commodity title as currently written will have a devastating impact on southern ag, which relies heavily on irrigation, and therefore benefits less from crop insurance. furthermore, the new revenue plan is designed to augment crop insurance, so this new program leaves gaping holes in the southern safety net. even with a reference price, the revenue plan may not be strong enough for our farmers to actually get operating loans. for example, most estimates find that rice, as you mentioned earlier, would lose more than